Abbey Spanier Bloghttp://blog.abbeyspanier.com
Tue, 08 Apr 2014 15:15:49 +0000en-UShourly1https://wordpress.org/?v=4.5Third Circuit Joins Seventh and Ninth Circuits Holding that Federal Common Law Standard for Successor Liability Applies to FLSA Claimshttp://blog.abbeyspanier.com/2014/04/08/third-circuit-joins-seventh-and-ninth-circuits-holding-that-federal-common-law-standard-for-successor-liability-applies-to-flsa-claims/
http://blog.abbeyspanier.com/2014/04/08/third-circuit-joins-seventh-and-ninth-circuits-holding-that-federal-common-law-standard-for-successor-liability-applies-to-flsa-claims/#respondTue, 08 Apr 2014 15:15:49 +0000http://blog.abbeyspanier.com/?p=4481Continue reading ]]>Last week, the Third Circuit issued a precedential decision holding that the federal common law standard for successor liability is applicable to claims brought under the Fair Labor Standards Act. The plaintiff filed a class and collective action complaint alleging that she was hired as a mortgage underwriter and was not paid overtime in accordance with federal law and the New Jersey Wage and Hour Law. The district court dismissed plaintiff’s amended complaint, but the Third Circuit vacated the district court’s decision and remanded for further proceedings.

The Third Circuit now applies the same successor liability standard as the Seventh and Ninth Circuits. Under this standard a court considers the following factors: (1) continuity of operations and work force of the successor and predecessor employers, (2) notice to the successor-employer of its predecessor’s legal obligation, and (3) ability of the predecessor to provide adequate relief directly. The Court of Appeals also concluded that the complaint adequately pled a claim under the successor liability theory and noted that “we will not fault [plaintiff] for her inability to make specific allegations as to the continuity of ownership at this stage, particularly given her reasonable assertion that the inner working of the privately held corporations at issue remain hidden to her.”

The Third Circuit also held that the complaint adequately alleged that the two corporate defendants were joint employers explaining that “the scenario described by [plaintiff], in which she and virtually all other Security Atlantic employees were abruptly and seamlessly integrated into REMN’s commercial mortgage business while some of those same employees continued to be paid by Security Atlantic, supports [plaintiff’s] claim that the two companies shared authority over hiring and firing practices.” Finally, the Third Circuit determined that the amended complaint provided enough information to “allow the court to draw the reasonable inference that the [individual] defendants are liable for misconduct alleged.”

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

As discussed in a post last year, on March 19, 2013, Justice van Rensburg of the Ontario Superior Court of Justice issued an opinion relating to overlapping class action proceedings against IMAX Corporation (“IMAX”) in the United States and Ontario, Canada (the “March 2013 Order”). In her decision, Justice van Rensburg recognized a U.S. class action settlement with IMAX, which had already been approved by a U.S. Court and amended its previous decision certifying a “global” class of investors that acquired IMAX shares on both the NASDAQ and TSX stock exchanges. The March 2013 Order amended the definition of the Ontario global class by removing all persons previously within the Ontario global class who decided to participate in the settlement arising out of the parallel U.S. proceedings, and approved by the U.S. Court. The removal from the Ontario global class of all class members who would partake in the U.S. settlement was a condition of that settlement and prevented any double recovery from both jurisdictions.

Shortly after the decision, Plaintiffs in the Canadian Action appealed the March 2013 Order.

On October 29, 2013, Justice Tzimas of the Ontario Superior Court of Justice issued an order denying the Canadian plaintiffs’ July 29, 2013 motion for leave to appeal the March 2013 Order. See Silver v. IMAX Corp., [2013] ONSC 1667 (Can. Ont. Sup. Ct. J.), Reasons for Judgment, October 29, 2013. A copy of that decision can be found here. In rejecting the Canadian plaintiffs’ motion for leave, Justice Tzimas determined, among other things that, “The amendment of the class would facilitate the exercise of a class member’s litigation autonomy. It would not take anything away. Nobody would be forcing a class member to exercise his option on the day of reckoning in one way or another. To the contrary, a refusal to amend the class would effectively extinguish the U.S. settlement completely, and therefore, take away the settlement option from the class members who wanted to settle their claim.” Id. at ¶44.

In November 2013, after the parties in the U.S. Class Action determined that the March 2013 Order is now final and unappealable, Lead Plaintiff in the U.S. Class Action moved the U.S. Court for entry of final judgment. On November 21, 2013, the Court entered a final judgment dismissing all claims against defendants IMAX, Richard L. Gelfond, Bradley J. Wechsler, Francis T. Joyce and PricewaterhouseCoopers-Canada LLP (the “Final Judgment Order”). The Final Judgment Order permits the U.S. settlement to be concluded and payments to eligible claimants to proceed.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

]]>http://blog.abbeyspanier.com/2014/01/07/ontario-court-upholds-amendment-to-imax-canadian-global-class-certification-order/feed/0Happy Holidayshttp://blog.abbeyspanier.com/2013/12/23/happy-holidays/
http://blog.abbeyspanier.com/2013/12/23/happy-holidays/#respondMon, 23 Dec 2013 14:28:13 +0000http://blog.abbeyspanier.com/?p=4471
]]>http://blog.abbeyspanier.com/2013/12/23/happy-holidays/feed/0Social Media Accounts Are Fair Game in Discoveryhttp://blog.abbeyspanier.com/2013/12/17/social-media-accounts-are-fair-game-in-discovery/
http://blog.abbeyspanier.com/2013/12/17/social-media-accounts-are-fair-game-in-discovery/#respondTue, 17 Dec 2013 14:25:29 +0000http://blog.abbeyspanier.com/?p=4460Continue reading ]]>A recent Pennsylvania State Court order granting a defendant’s motion to compel the production of one of the plaintiff’s Facebook log-in credentials found that social media accounts–even if set to private–are fair game in discovery.

During the deposition of one of the plaintiff’s, Jennifer Largent, the defendant learned that Ms. Largent had a Facebook profile and that she used it regularly. However, she declined to disclose any information about the account and plaintiffs’ counsel advised that it would not voluntarily turn over such information.

Months prior, Ms. Largent’s profile was public, meaning that anyone with an account could read or view her profile, posts and photographs, but she changed her privacy settings to private.

In support of its motion to compel, the defendant claimed that some of Ms. Largent’s posts that had been publicly accessible contradict plaintiffs’ claims and, specifically, that Ms. Largent posted several photographs that show her enjoying life with her family and a status update about going to the gym.

Plaintiff argued that the discovery sought by the defendant was irrelevant, that disclosure of her Facebook account access information would cause unreasonable embarrassment and annoyance, and that such disclosure may violate certain privacy laws.

The Court was not persuaded. As Judge Walsh explained, “[o]nly the uninitiated or foolish could believe that Facebook is an online lockbox of secrets.”

After reviewing a small but growing body of relevant case law, the Court found that “it is clear that material on social networking sites is discoverable in a civil case.” Information posted to the social media site is shared with third parties and, thus, there is no reasonable expectation of privacy in such information. The plaintiffs failed to cite any privacy law applicable to individuals that would shield production. And that, because defendant would bear the cost of investigating plaintiff’s Facebook profile, “this is one of the least burdensome ways to conduct discovery.”

The ruling is well-reasoned and consistent with existing case law, suggesting that this issue is likely to be widely resolved in favor of disclosure.

As such, we believe plaintiffs’ counsel should make discussing their clients’ social media accounts a routine part of their intake procedures depending on their practice areas and that litigants should be aware that setting a Facebook page to “private” does not necessarily mean it will be out of bounds in Court.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

]]>http://blog.abbeyspanier.com/2013/12/17/social-media-accounts-are-fair-game-in-discovery/feed/0JPMorgan Loses Bid to Prohibit Class Arbitrationshttp://blog.abbeyspanier.com/2013/12/03/jpmorgan-loses-bid-to-prohibit-class-arbitrations/
http://blog.abbeyspanier.com/2013/12/03/jpmorgan-loses-bid-to-prohibit-class-arbitrations/#respondTue, 03 Dec 2013 19:37:15 +0000http://blog.abbeyspanier.com/?p=4446Continue reading ]]>A California federal judge denied JPMorgan’s motion to compel arbitration on an individual basis. Two former JPMorgan employees filed a class action complaint alleging violations of state and federal labor laws on behalf of JPMorgan appraisers. As part of their employment, plaintiffs entered into arbitration agreement providing that “Any and all disputes that involve or relate in any way to my employment (or termination of employment) with Washington Mutual shall be submitted to and resolved by final and binding arbitration.” The agreements, however, did not contain express waivers of class, collective, or representative claims.

The issue before the court was whether the court or the arbitrator decides if plaintiffs can arbitrate on a class, collective, or representative basis. U.S. District Judge Staton noted that neither side disputed that the claims were subject to arbitration. The Court found “useful guidance” in the Supreme Court’s plurality opinion in Green Tree Financial Corp. v. Bazzle. The Judge explained that the “only question, as in Bazzle, is the interpretative one of whether or not the agreements authorize Plaintiffs to pursue their claims on a class, collective, or representative basis. That question concerns the procedural arbitration mechanisms available to Plaintiffs, and does not fall into the limited scope of this Court’s responsibilities in deciding a motion to compel arbitration.”

Although the Supreme Court has not yet ruled on whether it is up to the court or an arbitrator to decide whether class arbitration is permitted based on a review of an arbitration agreement, the Court found Bazzle to be persuasive and agreed with its determination that “whether certain arbitration agreements authorized class arbitration properly lay in the first instance with an arbitrator, not a court.” Judge Staton supported her conclusion by pointing to the Third Circuit decision, Vilches v. The Travelers Companies, Inc., which relied on Bazzle and ruled that the availability of class proceedings was a question for the arbitrator.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

]]>http://blog.abbeyspanier.com/2013/12/03/jpmorgan-loses-bid-to-prohibit-class-arbitrations/feed/0Court Certifies Class of Rite Aid Store Managers Under Rule 23http://blog.abbeyspanier.com/2013/11/19/court-certifies-class-of-rite-aid-store-managers-under-rule-23/
http://blog.abbeyspanier.com/2013/11/19/court-certifies-class-of-rite-aid-store-managers-under-rule-23/#respondTue, 19 Nov 2013 16:18:31 +0000http://blog.abbeyspanier.com/?p=4434Continue reading ]]>A former Rite Aid store manager filed a complaint in the Southern District of New York alleging that Rite Aid failed to pay its store managers overtime in violation of the Fair Labor Standards Act (the “FLSA”) and the New York Labor Law (the “NYLL). The plaintiff claimed that store managers had to work overtime to perform non-exempt tasks including duties of cashiers and stock handlers. The plaintiff moved to certify a class of store managers under Rule 23 and Rite Aid moved to decertify the conditionally certified FLSA class. U.S. District Judge J. Paul Oetken granted the motion for class certification of the state law claims, but only as to liability and not for damages. The court also refused to decertify the FLSA collective action.

The parties disputed whether the members of the class satisfied the commonality and typicality requirements under Rule 23. The court concluded that “(1) Plaintiff’s portrayal of SM [store managers] as automatons, who perform rote tasks as explicitly directed by RA [Rite Aid] is inaccurate; and (2) despite their obvious discretion, however most SMs perform a similar mix of duties, and at the relevant level of generality, exercise their discretion in similar ways, supporting a commonality finding.” The court also noted that “the differences among SMs are marginal and expected, rather than hyper-individualized and unpredictable.” The court, however, refused to certify the class for damages purposes explaining that “there is no showing from Plaintiffs that the relevant records for SMs even exist, let alone a sufficient explanation of an approach for calculating damages.”

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

]]>http://blog.abbeyspanier.com/2013/11/19/court-certifies-class-of-rite-aid-store-managers-under-rule-23/feed/0Email Privacy Rights Upheld Against Googlehttp://blog.abbeyspanier.com/2013/11/05/email-privacy-rights-upheld-against-google/
http://blog.abbeyspanier.com/2013/11/05/email-privacy-rights-upheld-against-google/#respondTue, 05 Nov 2013 14:04:48 +0000http://blog.abbeyspanier.com/?p=4426Continue reading ]]>A district court in California joined a growing number of other courts in finding that Google may not hide behind the “ordinary course of business” exception found in the Electronic Communications Privacy Act (“ECPA”), 18 U.S.C. §§ 2510, et seq., to scan its users’ emails with impunity.

According to the plaintiffs in In re: Google Inc. Gmail Litigation, No. 13-md-02430, since approximately 2008, Google has intercepted and read the content of all emails that were sent or received by users of its free email service, Gmail, for the purposes of sending an advertisement relevant to that email communication to the recipient, sender or both.

The plaintiffs further alleged that the process by which Google intercepted and read its users’ emails occurred and was conducted separate from Google’s other email processes, including spam and virus filtering.

The plaintiffs claimed that Google was in violation of the ECPA, which generally prohibits the interception of “wire, oral, or electronic communications” and provides a private right of action against any person who “intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication.” 18 U.S.C. § 2511(1)(a).

The law defines “intercept” as “the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device.” Id. at § 2510(4).

Google argued that there was no interception because, under the “ordinary course of business” exception, “any telephone or telegraph instrument, equipment or facility, or any component thereof . . . being used by a provider of wire or electronic communication service in the ordinary course of its business” falls outside of the definition. 18 U.S.C. § 2510(5)(a)(ii).

However, the Court rejected Google’s reasoning, finding that the ECPA exception should not be interpreted so broadly as to permit the company to do anything it wished with its users’ data.

The exception should be interpreted narrowly. The Court specifically found that the exception is designed only to protect electronic communication service providers against a finding of liability under the law where the interception facilitated or was incidental to provision of the electronic communication service at issue.

Because the plaintiffs had plausibly alleged that Google intercepts its users’ emails for the purpose of creating user profiles and delivering targeted advertising, processes which are not instrumental to Google’s ability to transmit emails, the Court denied Google’s motion to dismiss plaintiffs’ claims.

In Corvello v. Wells Fargo Bank, NA, 11-16234, 11-16242, 2013 WL 4017279 (9th Cir. Aug. 8, 2013) (a copy of the opinion can be found here), the Ninth Circuit reversed the lower Court’s dismissal of two consolidated class action complaints, holding that if a borrower complies with a standardized Home Affordable Modification Program (“HAMP”) trial period plan (“TPP”), the mortgage servicer is contractually required to either offer a permanent modification or promptly notify the borrower, in writing, that he or she does not qualify.

In aligning with the Seventh Circuit’s decision in Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), the Ninth Circuit rejected Wells Fargo’s argument that the promise to provide a permanent modification is not enforceable where a fully-executed modification may not have been delivered. Corvello, 2013 WL 4017279 at *4. Citing Wigod, the Ninth Circuit recognized that banks are “required to offer permanent modifications to borrowers who completed their obligations under the TPPs, unless the banks timely notified those borrowers that they did not qualify for a HAMP modification.” Corvello, 2013 WL 4017279 at *4. In reversing the district Court, the Ninth Circuit held in relevant part:

Wells Fargo’s interpretation of the TPP was suspect because it allowed banks to avoid their obligations to borrowers merely by choosing not to send a signed Modification Agreement, even though the borrowers made both accurate representations and the required payments. As the Seventh Circuit put it, Wells Fargo’s interpretation would allow it to “simply refuse to send the Modification Agreement for any reason whatsoever—interest rates went up, the economy soured, it just didn’t like [the Borrower]—and there would still be no breach … turn[ing] an otherwise straightforward offer into an illusion.” Wigod, 673 F.3d at 563

We believe the reasoning in Wigod is sound. Paragraph 2G cannot convert a purported agreement setting forth clear obligations into a decision left to the unfettered discretion of the loan servicer. The more natural and fair interpretation of the TPP is that the servicer must send a signed Modification Agreement offering to modify the loan once borrowers meet their end of the bargain.

***

Wells Fargo’s own failure to fulfill the notification obligation does not deprive plaintiffs of the benefits of their agreement.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

]]>http://blog.abbeyspanier.com/2013/10/29/ninth-circuit-revives-hamp-claims-against-wells-fargo/feed/0Conditional Certification in Second OT Collective Action Granted Against GEICOhttp://blog.abbeyspanier.com/2013/10/22/conditional-certification-in-second-ot-collective-action-granted-against-geico/
http://blog.abbeyspanier.com/2013/10/22/conditional-certification-in-second-ot-collective-action-granted-against-geico/#respondTue, 22 Oct 2013 12:49:14 +0000http://blog.abbeyspanier.com/?p=4410Continue reading ]]>A recent ruling in the United States District Court for the District of Maryland reaffirms a defining characteristic of the collective action.

Potential claimants’ legal rights are preserved unless and until they affirmatively agree to “opt in” to the litigation. They may elect to participate, file an individual lawsuit or do nothing at all.

With class actions, which proceed under Federal Rule of Civil Procedure 23, the situation is reversed. Potential claimants must affirmatively “opt out” of a certified action otherwise their legal rights will be resolved in the litigation.

As such, inaction by potential claimants may result in very different consequences depending on whether the claims are being resolved under the FLSA or Rule 23.

In Vetter v. GEICO General Insurance Company, et al., No. 8:13-cv-00642 (D. Md. Sept. 25, 2013), the court was confronted with a second motion for conditional certification and judicial notice under the FLSA for a group of GEICO Security Investigators who the plaintiffs claimed had been misclassified as exempt and, thus, not owed overtime pay.

Defendants claimed that the plaintiffs were precluded from seeking collective treatment in the latter case because they had previously received notice in a prior case and elected not to participate.

However, the plaintiffs correctly argued that the law is clear that the opt-in provision of FLSA provides for no legal effect on those parties who choose not to participate. Despite the identical nature of the two proceedings, the plaintiffs also argued that a second judicial notice was still appropriate because the prior notice was obviously ineffective to notify potential plaintiffs of their right to opt in to the new case.

The court sided with the plaintiffs and granted the motion for conditional certification and judicial notice.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

]]>http://blog.abbeyspanier.com/2013/10/22/conditional-certification-in-second-ot-collective-action-granted-against-geico/feed/0Home Care Workers Finally Protected by Federal Minimum Wage and Overtime Lawshttp://blog.abbeyspanier.com/2013/09/24/home-care-workers-finally-protected-by-federal-minimum-wage-and-overtime-laws/
http://blog.abbeyspanier.com/2013/09/24/home-care-workers-finally-protected-by-federal-minimum-wage-and-overtime-laws/#respondTue, 24 Sep 2013 18:51:30 +0000http://blog.abbeyspanier.com/?p=4401Continue reading ]]>On September 17, 2013, the U.S. Department of Labor released its final rule extending federal minimum wage and overtime protections to approximately two million home care workers who care for the disabled, ill, and elderly. The new rule narrows the companionship exemption under the Fair Labor Standards Act (“FLSA”). The final rule was announced nearly two years after the Obama administration first proposed the rule and after receiving approximately 26,000 public comments. The Department of Labor issued the new rule because the home care industry has radically changed and grown since Congress created the companionship exemption.

Since 1974, “domestic service” employees have been covered by the FLSA and have included cooks, housekeepers, maids, and gardeners. However, there were three exemptions under the FLSA relating to “domestic service” workers: (1) casual babysitters, (2) those providing “companionship services” such as companions for elderly persons or persons with an illness, injury or disability and (3) live-in domestic workers.

The final rule contains significant changes from the prior regulations, including: (1) the tasks that comprise “companionship services” are more clearly defined and (2) exemptions for live-in domestic service employees and companionship services are limited to the family, household, or individual using the services. The new rule prohibits third party employers, including home care agencies, from claiming live-in or companionship exemptions. The final rule with become effective on January 1, 2015 in order to give Medicaid programs and families who use these home care workers time to prepare.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.